National Defence Committee on Sept. 26th, 2023

[Richard Foster]

If I understood your question correctly, I would say that research and development….

Could you repeat your question, please?

[Christine Normandin, Bloc, Saint-Jean, QC]

I'd be happy to.

Should the government itself invest more in research and development rather than subcontracting it to industry, in a way? Industry uses industrial and technological benefits as a multiplier. In addition, the industry makes decisions based on its needs rather than doing research and development based on the needs of the military.

[Richard Foster]

That's not necessarily the case. I think industry and government need to work together more. The government is currently investing in research and development in a number of areas that aren't necessarily advantageous for the industry. I think it's losing a bit of money because other countries are doing exactly the same research and are further ahead than Canada.

I think it would be better to work together to find the best place to invest so that Canada can be more competitive on the international market. That way, instead of spending money on a number of research areas, we would focus on a few, probably a dozen. So there would be more money if industry and government worked together.

[Christine Normandin, Bloc, Saint-Jean, QC]

Would that make us a more effective partner internationally? It would also perhaps make it possible to invest more and to get closer to our 2% commitment to NATO.

[Richard Foster]

Yes, it's possible.

[The Chair, Liberal, John McKay]

Thank you, Ms. Normandin.

Ms. Mathyssen, you have five minutes.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Thank you, Mr. Chair.

Mr. Jaramillo, your organization, Project Ploughshares, introduced a new framing of Canada's security development and introduced the five Ds of that security envelope. These are development, democracy, disarmament, diplomacy and defence.

Could you tell this committee about that concept and how Canada could benefit from that perspective on how we spend that money?

[Cesar Jaramillo]

Absolutely. Thank you very much for that question.

The first thing I will say is that one of those Ds—and we refer to this package as “the five Ds”—is indeed defence. Ploughshares does not—and it's not my intention here—question or challenge the very basic notion that defence is and can be a very important element of Canada's projection into the world and that we need an adequate and reliable level of preparedness for the Canadian Armed Forces.

However, we consider it problematic when we observe a trend or trajectory in Canada and globally of an overprioritization of defence, especially when this comes at the expense of, or to the detriment of, the other dimensions—once again, diplomacy, development, disarmament and democracy.

Therefore, what we would like to see, and what we feel would serve Canada's interests abroad and the international community, would be a more balanced approach to these dimensions—to have more investments, more intentional investments, in diplomacy, in democracy building, in development and in disarmament. Historically, it is true that inasmuch as we further invest in those other categories, the need to rely solely or primarily on the defence dimension will decrease.

That is a conversation that needs to be approached with nuance, because it is not saying that defence is not important, but it is saying that it needs to be balanced with the other tools at the disposal of Canada for projecting its foreign policy

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Then it is about finding that balance and being far more proactive, and I certainly agree with that.

Often I feel as though our defence procurement strategy is lacking a human rights-based lens, and there have been major disruptions to our defence supply chain due to defence manufacturing within the sector conflicting with human rights and due to the crises that exist within human rights.

You recently wrote in The Globe and Mail about Canada's Arms Trade Treaty obligations, specifically regarding Turkey, which was transferring some Canadian exports to unauthorized end-users. Can you talk about those treaty obligations and sanctions and what regulatory changes need to be made to ensure that Canadian defence exports are protected in that way?

[Cesar Jaramillo]

Absolutely. Thank you again for that relevant question.

The first thing to say is that is not just the Arms Trade Treaty. You're absolutely right that Canada is a party to the international Arms Trade Treaty, and that comes with legal obligations. However, there are also domestic export controls that Canada needs to abide by when it makes its export decisions.

The demonstrable reality right now is that the majority of Canadian arms exports are going to authoritarian regimes and questionable recipients. That is true today, that was true last year, and that was true the year before, the year before and the year before that. More than half of Canadian arms exports are going to questionable recipients and have been misused. They go to questionable recipients such as Saudi Arabia and have been misused, such as in the case of Turkey, where Canada has authorized the export of drone-mounted targeting technology produced by L3Harris WESCAM, despite the fact that Turkey has misused it in Iraq and in Syria and has shipped it to Libya and, despite a UN arms embargo, has diverted it to the conflict in Nagorno-Karabakh and to its ally Azerbaijan, which has been accused of committing abuses during the course of that conflict.

Once again, it is nuance. There is every need to maintain a healthy and reliable industrial base here in Canada, but the fact that the authorization of arms exports to questionable recipients is required to maintain it should really be a cause for concern and for pause.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

We were speaking earlier about changing some of the rules and limiting those rules or having them defined differently. Oftentimes we've heard about the suspension of rules for the public good. Can you comment on that in terms of the conversation on how that impacts human rights?

[Cesar Jaramillo]

Absolutely—

[The Chair, Liberal, John McKay]

Excuse me. We're going to have to leave Ms. Mathyssen's question. I am very disciplined about the five minutes, because I want to get through two more five-minute rounds. Ms. Mathyssen can come back to her question in another round.

[Cesar Jaramillo]

Thank you.

[The Chair, Liberal, John McKay]

With that, Mrs. Gallant, you have five minutes, please.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Fadden, in addition to suspending certain rules, what steps must the government take to decouple defence procurement from regional, industrial and innovational development?

[Richard Fadden]

I wish I had an answer to that, but I think the beginning of it is the acceptance that in some cases defence acquisition is more important than regional economic development. I don't think it needs to be disengaged or disconnected in every single case, but we never make the case anymore.

I've sat in what I call the peanut gallery through two or three governments and listened to the ministers talking about this, and there are no criteria. A bunch of them will support regional development and industrial development and a bunch will support acquisitions. There are no criteria. There are no rules they could apply.

I think the beginning of all of this would be the elaboration of criteria that would allow the suspension of regional development considerations. The criteria would be publicly stated and publicly argued, maybe by this committee. Doing it behind closed doors is not a great way of proceeding.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

What policies must be put in place to overcome the extreme risk aversion of both ministers and public servants in defence procurement? What steps do we need in order to trigger this culture change you spoke of?

[Richard Fadden]

Culture change, as you know, is one of the hardest things to bring about. I think the first thing would have to be a government-wide statement that we're expecting public servants to consider effectiveness as well as rules-based approaches to things. We would have to find a few clear cases of somebody who made a mistake and wasn't taken behind the barn.

A lot of it is behavioural over the course of a short period of time. I don't think it's going to happen very quickly, but today part of it would be that you cannot jump on every single little problem that arises in defence procurement as if the government deserves to be defeated. I'm not directing this at you because you're the opposition today. It's the same if this side of the room were in the opposition, and that's effectively what happens. I understand there's an opposition, and that's what it's meant to do—oppose—but somehow we need to find a way to raise the threshold of disapproval when something goes wrong. I think people should have to be able to justify when they take risks or they violate a rule, and sometimes you can do it very effectively.

One of the things I used to argue to my colleagues when I was in defence was that, if you're being asked to do something that strikes you as being nonsensical, ask for an exemption. If I can't give it to you, I'll ask the minister. In very many cases it's not a big deal. It's not violating human rights—to your point. It's just some rule that somebody set up 15 years ago and that we've never changed. As in most areas of government, you establish a rule and then you add to it over the decades. Just a systematic review of the rules, to that point, might not be a bad thing, because you have Treasury Board, public services, the Privy Council Office and ISED all adding rules to defence procurement. They don't withdraw very many, but they do tend to add them over the years.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

In your estimation, what are the most pre-eminent changes in terms of security threats faced by Canada that indicate defence spending should be taking on a higher priority?

[Richard Fadden]

I think they are the rise of China and its much more aggressive foreign and defence policy, the advent of significant cyber-attacks against Canada and all our western allies, and what Russia is doing in Ukraine. A lot of people question whether we should be supporting Ukraine, but there but for the grace of God go any number of other countries.

I think those are the main ones: China, Russia, the rise of cyber and just generally the disaggregation, the less forceful leadership of the United States, which actually held us together after the Cold War.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

What criteria should be used to determine the specific procurement projects that can be exempt from some or all the rules that govern them?

[Richard Fadden]

I think the first has to be the certification by the chief of the defence staff that whatever is needed is needed now and within a particular time frame, along with a clear elaboration of why it can't be done with the existing rules, a clear indication of what specific rule is being suspended and for what specific purpose, and a clear indication of how this is going to speed things up.

I think to a very great extent it's case-specific, but you have to start with a clear, unambiguous statement of the chief of the defence staff that, whatever is at issue, it needs to be purchased right now.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Thank you.

[The Chair, Liberal, John McKay]

It's probably not a good day to be talking about mistakes.

Ms. Lambropoulos, you have the floor for five minutes.